Oil fell ahead of an interest-rate decision from the Federal Reserve following a two-day rally that was driven by an easing of concerns over banking crises in the U.S. and Europe.
West Texas Intermediate futures traded near US$69 a barrel after rising almost 4 per cent over the previous two sessions, as U.S. officials studied ways they might temporarily expand protection for all deposits. Markets are pricing in a roughly 80 per cent chance that the Fed will hike rates by a quarter point on Wednesday.
The banking turmoil drove oil to a 15-month low last week and whipped up volatility across global markets. A raft of market watchers remain bullish on the outlook, in part due to China’s rebound from Covid curbs, with predictions for prices in the second half ranging between US$80 and US$140 a barrel.
Russian has decided to keep its output at a reduced level through June, taking into account the current situation, Deputy Prime Minister Alexander Novak said. The nation pledged to cut its production by 500,000 barrels a day in March. “The rally in crude oil prices is taking a breather ahead of the FOMC announcement,” said Charu Chanana, a market strategist for Saxo Capital Markets Pte. Still, futures remain supported by U.S. measures toward covering all deposits and Russia extending its output cut, she added.Brent for May settlement dropped 0.8 per cent to US$74.73 a barrel.
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